IRS REVOKES REV. RUL. 78-130, ISSUES "TRIPLE DROP AND CHECK" GUIDANCE

Rev. Rul. 2015-9, 2015-21 IRB 972, and Rev. Rul. 2015-10, 2015-21 IRB 973, address step transaction issues when a target corporation is transferred in a Section 351 exchange prior to a reorganization. The IRS generally applies the step transaction doctrine to a series of formally separate steps that...

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Bibliographic Details
Published in:Journal of International Taxation 2015-07, Vol.26 (7), p.15
Main Authors: Collins, Marty, Anson, Tim, Dubert, Carl, Urse, Michael
Format: Article
Language:English
Subjects:
Corporate reorganization
Disregarded entities
International taxation
Limited liability companies
Revenue procedures & rulings
Step transaction doctrine
Online Access:Get full text
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Summary:Rev. Rul. 2015-9, 2015-21 IRB 972, and Rev. Rul. 2015-10, 2015-21 IRB 973, address step transaction issues when a target corporation is transferred in a Section 351 exchange prior to a reorganization. The IRS generally applies the step transaction doctrine to a series of formally separate steps that are all part of a single, integrated, and prearranged plan to determine whether the steps, when viewed together, qualify as a reorganization under Section 368. As the Section 367 consequences differ depending on whether a transaction is treated as a triangular C reorganization or a Section 351 transfer followed by a D reorganization, it could be inferred that Rev. Rul. 2015-9 is an extension of Rev. Rul. 70-223, 1970 CB 79, where the IRS respected the form of a downstream merger rather than a liquidation, when there was an overall business purpose for the transaction but differing tax results.
ISSN:1049-6378